#423. Illinois by the Numbers: Five Alarming Trends to Watch

Posted on | The Agurban
We live here. We know how bad it is. Hopefully other states have learned, or are learning, from the perils of Illinois’ despairing situation. Here’s how Doug Whitley, President and CEO of the Illinois Chamber of Commerce sees it (condensed):

Illinois by the Numbers: Five Alarming Trends to Watch    
Understanding Illinois’ demographics and population trends is fundamental to understanding the mounting economic pressures on state government finances. Illinois has changed a great deal in the last several decades. Our population has become older, more diverse and, unfortunately, increasingly dependent on government. Recent statistics show steep job and population losses in Illinois and increases in average age, poverty level and individual tax burden. Together, these trends paint a revealing and sobering picture of the state.

In order to reverse these trends we must address the root causes of increased government spending, as well as the factors that influence the private sector’s decisions on whether to invest or disinvest in our state.

Trend 1: Illinois is Losing Residents – 
Each year, moving company United Van Lines conducts a study that tracks inbound and outbound migration trends throughout the country. In 2012, the study showed Illinois ranked second in the outbound category. The previous year, our state topped the list. In all, Illinois lost more than a half-million residents between 2000 and 2009. Data from the 2011 U.S. Census puts the state’s net migration at 79,459 people – the second biggest population loss in the country. Between 1995 and 2009, one taxpayer moved out of Illinois every 10 minutes. Population is central to commerce, employment and revenue generation for both the private sector and governments.

Trend 2: Illinois is Hemorrhaging Jobs – The state’s population has declined dramatically, but the decline in jobs has been even worse. As the State of Illinois Economic Forecast points out, Illinois’ recession was more severe than the nation’s, and its recovery has been slower. Illinois has recorded a net loss of 270,000 jobs since the beginning of the recession in December 2007. Some industries have been especially hard hit. Illinois lost 34 percent of its manufacturing jobs from 1997 to 2012. Construction jobs – which pay almost 24 percent more than the national average – decreased 29.6 percent from 2000-2012.

Unless we make serious improvements to Illinois’ business climate and economy, we have no hope of closing our state’s jobs gap anytime in the near future.

Trend 3: Illinois’ Population is Aging…with Serious Implications for State Budgets –The population of Illinois, like much of the U.S., is aging dramatically. Left unaddressed, this trend will bring major financial shockwaves to our state and local governments, especially with regards to pensions and social services.

The number of residents 60 years old and older is expected to increase from 2 million to more than 3.6 million by the year 2030 – a 77 percent increase – according to the Illinois Association of Area Agencies on Aging. By 2030, one in every five Illinoisans will be 60 or older. This trend gives employers pause as they contemplate their future workforce requirements. As “baby boomers” move into retirement, will the state have the workers to meet their needs?

Trend 4: Poverty on the Rise in Illinois – Two recently released reports (Voices for Illinois Children’s Illinois Kids Count 2013 report and Heartland Alliance 2013 Report on Illinois Poverty) shine a disturbing light on how the state’s economic struggles have affected families. The results show pockets of poverty throughout the state’s 102 counties. Consider:
  • Roughly 4.1 million Illinois residents – or about 33 percent of the state’s population – live in or near poverty.
  • More than 20 counties – many in central and southern Illinois – still had unemployment rates of over 10 percent in December 2012, compared to statewide average of 8.7 percent and 7.8 percent for the nation. In January 2013, Illinois’ unemployment rate increased to 9 percent while the national rate ticked up to 7.9 percent.
  • Roughly 822,000 Illinois children receive benefits from the Supplemental Nutrition Assistance Program (SNAP/food stamps).
To arrest these disturbing trends, we must work to improve the economy and accelerate private sector job growth. Our goal should be to make every Illinois resident a productive member of society. The more people who support themselves, pay taxes and contribute to the economy, the less demand there is for government programs and services.

Trend 5: Illinois’ Growing Tax Burden – Think about it: The loss of hundreds of thousands of residents … the aging of the population and the resulting increase in non-taxed pension benefits … the rising poverty level and the need to care for those who are not self-sufficient…the growing reliance on government financed health care. Who is going to pay for the rising costs of government when there are fewer people actively engaged in the workforce?

The good news is that Illinois has a diverse economy that benefits from many positive geographic and economic strengths, including: third largest population center and market in the country; leading industrial and agricultural state; economic capital of the heartland with extensive business and financial services; headquarters for many multi-national corporations; and extensive transportation, distribution and infrastructure hub for all modes (including pipelines and fiber networks).

Those are just a few of the state’s positive attributes.

We must conclude that much of our state’s economy has continued to be successful in spite of failed government leadership and policies. It seems clear that Illinois’ political leaders have too often focused on trying to resolve the government’s problems, instead of taking a big-picture approach and looking for ways that government cooperation and participation can unleash the power of free enterprise. 

The Solution:  Jobs and Economic Growth
Imagine that we were able to close the “jobs gap” and add 500,000 more people to Illinois’ workforce—the tax revenue and economic benefits generated would be tremendous.  Illinois elected leaders need to come together and find a way to make that goal a reality.  We need employers to stop asking, “Why does our government make it so hard to do business in Illinois?”
We recognize that action is needed and necessary for our state to continue to function. For the full script, visit here.